Q: What assets/accounts should be placed in a trust? 

A: Any assets or accounts that are not a retirement account and are intended to adhere to the guidelines and customizations established in your living trust should be placed in the name of that trust.

‍

Q: What about retirement accounts (e.g. 401ks, IRAs, Roths, SEP IRAs etc.), they don’t go into the living trust? 

A: No, the designated beneficiaries specified with the custodian of the retirement account hold precedence. In the event of the account owner's passing, the custodian does not inquire about the existence of a will or trust to compare with the beneficiary designation they have on record.

That said, retirement accounts are often mentioned in the trust and will documents to provide direction on how the owner should list the beneficiary designation with the custodian to align with their overall estate plan. Additionally, some will choose to name their trust as either a primary beneficiary (if unmarried) or as contingent beneficiary (if they are married) of their retirement accounts ensuring consistent asset control after their passing. It's important to note that there are intricate planning details related to this, and we recommend consulting a Pattern advisor and an estate attorney for guidance.

‍

Q: How do you place assets into the trust? 

A: After your living trust has been drafted and finalized, the next step is what is referred to as ‘funding’ the trust. Just another way of saying, placing assets into the trust by re-registering your accounts to be in the name of your trust (so the trust name is what you’d see on statements). 

• Banks and brokerage investments: Re-registration process & paperwork for your existing accounts (custodians often allow you to keep the same account numbers since the tax ID will still be the same). 
• Real estate assets: Transfer the title with a quitclaim deed (non-sale deed transfer) reflecting the name of the trust and recorded with the county. 
• Cars: Update title with DMV process & paperwork. 

All the organizations mentioned earlier likely also require a copy of your certification of trust, which is a 1-2 page summary of the essential provisions of the trust, excluding personal details of the full trust. 

‍

Q: Are there any issues or implications related to access of any assets, accounts, or money that are in a living trust?

A: No. A living trust will have the same tax ID as the grantor (the person(s) who the trust was created by). From the IRS’ standpoint, your living trust is treated as you from a tax perspective during your lifetime. You don’t need to file a separate tax return. While you are alive, you can move assets in and out of the trust without worrying about tax consequences or restrictions. It would be like transferring to and from yourself. 

‍

Q: If you have a living trust, is having a will necessary too? 

A: No. Obtaining a living trust will include the full suite of documents for a robust estate plan. A living trust will also include the following supporting documents: 

• Last will & testament (aka pour over will) - final wishes for your dependents and arrangements.
• Living will - preferences for healthcare and medical treatment 
• Certification of trust - a summary of key provisions of trust but without personal details of full trust. 
• Schedule of assets - document of your current assets and/or net worth (assets and liabilities) that provides important planning context for you and the estate attorney as you build out your plan.
• HIPAA authorization - person(s) authorized to receive your personal health info.
• Powers of attorney (POA) - person(s) to manage your personal responsibilities if you are unable to. This is often the same person as your successor trustee of the trust.

‍

Q: What if I already have a will and now want a living trust? 

A: Include it in the information you provide the estate planning attorney service you are working with to create your living trust. They will reference it as a great tool to discuss life changes, while also making clear what new estate documents you create supersede any prior documents. 

‍

Q: Where is the best place to start in seeking legal estate planning services to create my living trust? 

A: To set up a living trust you have two broad options: 

1. An online trust writing company - Often vastly cheaper with flat rate fees under $1k. Some offer an optional annual subscription for ongoing reviews/document updates as life changes and you want to look at updating your living trust. The online option can be a good solution for a family that has a reasonably standard set of legacy wishes and overall list of assets. 

2. A local law firm/attorney that practices in the area of estate planning - Look for the ones that offer a free initial consultation, interview a few, then decide who you prefer to work with. Expect to encounter a range of total costs, with estimates varying from a few thousand dollars to the higher end of around $10,000. Additionally, be aware that different billing methods are used, including flat fees and hourly rates. A local attorney is often a wise use of the additional expenditure if there are many complexities in your goals and/or current balance sheet of assets (e.g., special needs/adult dependents you are supporting, owning a real estate portfolio, owning a business, blended family with children from past relationships, etc.) 

‍

At Pattern, we believe that every person’s situation and goals are unique; there isn’t a one-size fits all answer. Our advisory team is here to guide in your estate planning process. Keeping in mind your specific legacy goals, we’ll walk you through the unique solutions available and help guide you in the right direction. Download the Pattern iOS or Android app to connect with a Pattern advisor today.

‍